Daily Archives: May 20, 2016

Trump once revealed his income tax returns. They showed he didn’t pay a cent.

The last time information from Donald Trump’s income-tax returns was made public, the bottom line was striking: He had paid the federal government $0 in income taxes.

The disclosure, in a 1981 report by New Jersey gambling regulators, revealed that the wealthy Manhattan investor had for at least two years in the late 1970s taken advantage of a tax-code provision popular with developers that allowed him to report negative income.

Today, as the presumptive Republican presidential nominee, Trump regularly denounces corporate executives for using loopholes and “false deductions to “get away with murder” when it comes to avoiding taxes.

“They make a fortune. They pay no tax,” Trump said last year on CBS. “It’s ridiculous, okay?”

Read on.

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‘Panama Papers’ may help Sen. Grassley’s transparency legislation

DES MOINES | The “Panama Papers” — leaked documents from a Panama-based law firm that sets up anonymous shell companies for clients – may provide a spark for legislation Sen. Chuck Grassley says will increase corporate transparency.

“Transparency brings accountability. You get back to something that’s pretty basic to everything I do in government,” said Grassley, chairman of the Senate Judiciary Committee. Along with Rhode Island Democratic Sen. Sheldon Whitehouse he is co-sponsoring the Incorporation Transparency and Law Enforcement Assistance Act that would ensure the disclosure of beneficial owners in the United States.

The “Panama Papers,” the result of an investigation by the International Consortium of Investigative Journalists and more than 100 news outlets, illustrate the use of shell corporations by wealthy individuals, politicians and businesses to hide legal activities.

“The tool is used to avoid, well, I don’t know whether it would be just taxes or a lot of things other than taxes,” Grassley said. “Who knows about the underworld being involved, money laundering and I don’t know how many other things.”

When Iowa Citizen Action Network in Des Moines hosted a two-day seminar on the subject it attracted representatives of the faith community, small business and law enforcement. Much of their concern was the use of shell companies in human and drug trafficking, said Sue Dinsdale, ICAN executive director.

“I’ve been working on this for the past couple of years,” Dinsdale said. “It never gets a lot of traction because it’s not real exciting. But the ‘Panama Papers’ got people thinking and brought this to the forefront.”

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How Rudy Giuliani Helped Landlords Get a Tax Break With No Strings Attached

New York’s Legislature wanted to give tax breaks in Lower Manhattan in exchange for limits on rent increases. The mayor and the real estate lobby had another idea.

In June 1995, a proposal to revitalize the ghostly New York neighborhood near Wall Street was poised to pass the state Senate. The bill offered developers multimillion-dollar tax breaks if they were willing to turn aging office buildings into apartments. Landlords, in turn, would agree to limit rent increases, a standard provision for such programs.

However, just hours before the Senate was scheduled to adjourn for the summer, Joseph L. Bruno, the Republican leader of the Senate, surprisingly slammed the brakes and pulled the bill off the calendar. He later said the reason was simple: He wanted time to consult New York City’s mayor, Rudolph Giuliani.

In the months that followed, ProPublica has found, a handful of Republicans maneuvered behind the scenes to radically undermine the rent-stabilization aspect of the program without actually rewriting the bill. They accomplished this goal through a novel approach: Giuliani wrote Bruno a letter in August declaring that the city’s intention was for the rent limits to apply only to tenants who paid less than $2,000 a month. Anyone else would have to pay market rates.

No one attempted to change the language of the bill, which had already been approved by the Assembly. It said apartments were to be “fully subject’’ to rent-stabilization laws

The debate was brief when the Senate finally met in October. Just before the vote, a Republican Senator asked to read Giuliani’s letter into the record. None of the Senators commented on its contents, and the bill passed 53—1.

The tax program — known as 421-g — spurred the creation of almost 10,000 rental units that helped transform lower Manhattan over the past 20 years. However, three out of every four units created under the program were never rent stabilized because the initial tenants paid more than $2,000 a month.

As rents have gone up, many more units have escaped stabilization as developers, their lawyers, and officials in state and city government have accepted Giuliani’s letter as the last word on how to interpret the 1995 law.

The state housing authority cited Giuliani when it concluded in 1997 that expensive apartments could be rented without restrictions. The city asked developers applying for benefits under the program identify their units as stabilized or exempt. When tenants raised questions, landlords showed them Giuliani’s letter.

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Tampa Bay still sits near the top of the nation for ‘zombie homes’ in foreclosure

The Tampa Bay metro area continues to have one of the nation’s largest number of “zombie foreclosures” — vacant homes that banks are repossessing.

According to RealtyTrac, 627 bay area homes in some stage of foreclosure sat empty during the first three months of this year. Among metro areas with at least 100,000 residential properties, Tampa Bay ranked fourth in zombies after New York (3,526), Philadelphia (1,744) and Miami (651).

Compared to the same period last year, however, the number of bay area zombies dropped almost 15 percent. Nationwide, zombies are down 30 percent.

“Lenders have been taking advantage of the strong seller’s market to dispose of lingering foreclosure inventory over the past year,” Daren Blomquist, RealtyTrac’s senior vice president, said in a news release.

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Banks identify possible replacements for U.S. Libor

A group of global banks and clearing houses, working with U.S. regulators, said on Friday it has identified two possible replacements for Libor, the benchmark interest rate for $160 trillion worth of credit for everything from home mortgages to corporate loans.

The Alternative Reference Rates Committee (ARRC) said that together with the Federal Reserve it has identified the Fed’s Overnight Bank Funding Rate (OBFR) and the overnight rate on U.S. Treasury securities pledged as collateral in repurchase, or repo, transactions as alternatives.

The London Interbank Offered Rate has been in regulators’ cross hairs since its credibility was tarnished by a rate-rigging scandal emerging from the 2008 financial crisis. About a dozen global banks collectively have paid tens of billions of dollars in fines to settle the matter.

“The case for moving ahead to a new benchmark is very strong. The new benchmark is going be robust with a lot of transactions and will be resistant to manipulation,” Fed Governor Jerome Powell told Reuters.

ARRC said the two rates it identified as replacements represent “robust” markets, each with $300 billion worth of daily trades. Bankers and regulators have raised alarms about diminishing daily liquidity in the markets for unsecured loans like Libor, calling into question their reliability as a gauge for U.S. borrowing costs.

The stakes are large: Libor’s benchmark 3-month rate stands as a reference rate for pricing $160 trillion of loans in the United States and, together with companion rates in Europe and Asia, has some $350 trillion of global credit tied to it.

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Rules for ‘too big to fail’ insurance firms coming soon: Fed official

The Federal Reserve will soon take up rules for insurance companies deemed “too big to fail” intended to head off risks to U.S. financial stability, Fed Governor Daniel Tarullo said on Friday.

It will also in coming weeks propose requirements on how much capital that firms across the industry should hold, he said in a speech to the National Association of Insurance Commissioners.

The industry has waited for more than five years to see the proposals, which are tied to the Dodd-Frank Wall Street reform law passed in 2010 after the financial crisis.

Under the law, federal regulators can determine that non-bank companies such as American International Group Inc (>> American International Group Inc) could put the entire financial system in danger if they fail, and require they take certain measures to stave off threats.

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Congress to consider dramatic overhaul of credit reporting

Waters bill gives CFPB “explicit authority” to monitor credit scoring

The way consumers’ credit data is reported, recorded, and used by the nation’s credit reporting agencies could be about to dramatically change, if a newly introduced bill makes it way through Congress.

On Thursday, Rep. Maxine Waters, D-CA, introduced the new legislation, called the “Comprehensive Consumer Credit Reporting Reform Act of 2016,” which would, according to Waters’ office, “overhaul the American credit reporting system so that it is fairer, more accurate, and less confusing for consumers.”

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